China forecasts drop in oil output

China

BEIJING, January 17, 2017 – China’s National Development Reform Commission (NDRC) on Tuesday released a five-year report that projects a 7% drop in domestic crude oil production to 1.47 billion barrels per year by 2020.

A previous report, covering 2011-2015, forecast an output of around 1.58 billion barrels per year. The high cost of production at maturing fields, in addition to the global fall in oil prices are thought to be among the main factors affecting the decline in production.

While the NDRC estimates that declining output will result in daily production of around 4 million bopd, Wood Mackenzie forecasts that daily production will fall by 500,000 bopd to 3.5 million-3.6 million bopd by 2021.

As crude output is set to decline, natural gas is hitting its stride. NDRC anticipates an annual output of 220 bcm (7.77 tcf) of gas by 2020, up from 134 bcm (4.73 tcf) as reported in the 2011-2015 five-year plan. China forecasts that natural gas pipeline capacity will exceed 400 bcm (14.1 tcf) per year by 2020.

In other news, China has said that it will implement ‘national six’ grade petrol and diesel, which will have stricter regulations for pollutants such as olefins and aromatics. However, sulphur content will remain consistent with ‘national five’ fuels.